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Secret Deal For Railroad Hub Lays Bare Shady Practices At DOT

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The Tampa Tribune

Published: March 31, 2008

Just when you thought the state's secret deal with CSX Transportation could not smell worse, more pollution comes flowing from Tallahassee.

The state Department of Transportation said this week - in the name of public accountability, of course - that the price of purchasing 61 miles of track near Orlando and relocating a rail yard to Winter Haven has increased by a third. The cost to taxpayers could now top $649 million, up from $491 million in 2006.

Central Florida lawmakers accepted the increase without batting an eye. No matter that DOT so badly misjudged the costs. No matter that DOT tried to hide the project by calling it something else. No matter that other states refuse to pay for-profit railroads to lay tracks through remote areas, a policy decision DOT made without consulting the Legislature, which is supposed to make policy.

The price increase came to light after CSX said the deal wouldn't proceed unless the state made the railroad immune from liability in the event of a commuter train accident - an unreasonable demand that would make Florida taxpayers responsible even if CSX were at fault.

A House committee approved the provision last week, even as officials in Massachusetts, which ironically saw a CSX freight train ram a commuter train Tuesday night, declared the railroad's demand for immunity a "deal breaker."

Florida's secret deal with the for-profit railroad is bad public policy and has damaged the credibility of DOT, where officials work in secret with railroad friends and shift arguments depending on the day.

Let's Review The History

From the start, this deal has tipped toward the railroad.

Look at the history:

•Gov. Jeb Bush announced the plan with great fanfare in August 2006, though only a few people, mostly DOT officials and industry insiders, were part of the negotiations. Communities that will face a steady flow of mile-long trains were kept in the dark.

•DOT tried to hide the funding requests, seeking money for rail through different line items in the 2005 growth management bill. Never did the line items mention CSX.

•To prove the project's value, DOT hired a consultant who was already working hard to make the numbers work for commuter rail.

•DOT employees signed confidentiality agreements promising not to talk about the details. Gov. Charlie Crist, who has been a champion for open government, has yet to address this abuse.

The public does not trust this deal. Neither does the federal government, which has yet to come through with matching funding. The feds said in a November 2007 report that Florida had failed to make the case for commuter rail in Orlando.

Curiously, proponents say Florida's credibility - and its chances for federal funding - will suffer if the state attempts to renegotiate the CSX contract. Yet it's the federal government saying this deal doesn't pass the smell test. At least someone in government is looking out for taxpayers.

Look, Tampa supports Orlando's efforts to get commuter rail and move traffic off congested highways, but Florida should not plan major transportation projects that negatively affect neighboring regions without those communities at the table.

Neither DOT nor CSX has been persuasive in saying that the planned Winter Haven hub will be good for Lakeland, Bartow, Mulberry, Lake Wales, Plant City, Wildwood or Ocala.

And despite the promise of attracting well-paying jobs to the region, the railroad expects to create only 110 jobs. Its spokesman says the promised 8,000 new jobs will come from related businesses - such as dry cleaners and convenience stores - that grow to serve hub workers.

In other words, in anticipating the creation of new jobs, DOT relied on a wing and a prayer.

Hitching Up To Industry Insiders

The secrecy at DOT is benefiting industry insiders.

Tribune reporter Lindsay Peterson reported that during the CSX negotiations, former DOT Secretary Denver Stutler asked rail executive Earl Durden for advice. Durden chaired the Florida Transportation Commission when it approved a DOT plan that set aside money for CSX - a plan that also contained more than $6 million for a railroad Durden owned.

State law prohibits transportation commissioners from getting involved in DOT operations, including the awarding of contracts. The law also bans commissioners from having a financial interest in a DOT contract or benefiting from state contracts made during their terms.

But Durden had an interest in pushing the CSX deal - a $6 million interest.

Shifting In The Wind

When asked about the process, DOT officials shift their stories.

Last week they said the price increase had to do with rising construction costs for overpasses. In August 2006, the cost of improvements to a CSX freight line included five highway overpasses the state said would cost $59 million. The projected cost is now $203 million, though DOT insists the overpasses were planned not to meet the demands of increased freight traffic, but to meet the needs of drivers on congested roads.

So why did the department add the price increases into the CSX deal? And why should taxpayers trust these numbers?

It's time for Crist to pull this contract and renegotiate it on behalf of all Floridians.

Crist's silence is unbecoming for a governor who says he believes in transparency.

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